Consumer Guide to Health Care - Health Spending Accounts

There are several types of accounts that allow individuals to set aside money to pay for medical expenses. These accounts all offer tax advantages, but have different rules regarding eligibility and contributions. They include health savings accounts (HSAs), which have largely replaced Archer medical savings accounts (MSAs). HSAs are available to the self-employed and to employers of all sizes. The purchase of a high-deductible health plan is required. Flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) are not available to the self-employed and do not require the purchase of a high-deductible health plan.

Health savings accounts became widely available to consumers in 2004. These accounts have fewer restrictions than the Archer medical savings accounts that were made available to a limited number of people in 1996.

Getting started

Your first step is to figure out the type of health spending account for which you might qualify. You then need to carefully consider whether or not it will be beneficial for you to sign up. The following link can help: